HARARE – The long running case in which Ramatex SA – a Swiss registered raw materials trader and distributor, is claiming damages from local financial institution African Century Limited, is now awaiting judgment from the High Court’s Commercial Court.
Judgment was reserved to a later date last month.
The case highlights the legal challenges that the financial ecosystem continues to face over the abrupt switch to mono-currency in February 2019 and the impact it has had on attracting foreign investors and businesses into the country. Several cases emanating from this have gone before the courts while several more are still pending. In February 2019, a new law came into effect in Zimbabwe which converted foreign currency held in Foreign Currency Accounts into RTGS dollar amounts. The Reserve Bank of Zimbabwe issued a directive [RU 28/2019] in terms of which funds which banks were holding and had failed to transfer to foreign companies due to foreign currency shortages were to be registered with the RBZ as legacy debt and to be paid at the rate of 1:1 to the United States Dollar.
Ramatex is seeking for damages of almost US$1 million for breach of contract after ACL failed to register the funds, emanating from a supply deal with Turnall Holdings, as legacy debt to allow for the repatriation of the funds in US dollars, despite instructions having been sent to do so.
Ramatex operated an account with ACL, also known as a Collection Account denominated in United States dollars, into which its customers would deposit money.
Ramatex only discovered in November 2020 that the funds had not been registered as legacy debts, It is Ramatex’s contention that had ACL complied with its obligations, the money would have been released or registered under legacy debts.
As a consequence of the failure to register as legacy debt, the funds could only be denominated in Zimbabwe dollars, the value of which is less than US$3000 at the time of the filing of the claim due to the rapid depreciation of the local currency upon its reintroduction.
ACL however disputes the claim, maintaining instead that the application for registration of the Ramatex funds as a legacy debt was indeed filed with the RBZ timeously before the deadline of April 30, 2019, but was rejected because it did not contain all the necessary documents requested and stipulated by the RBZ.
However, Ramatex produced three letters from the RBZ that explained that the submissions had been done well after the deadline. According to RBZ, the application was delayed because it was filed late for the second time as they had a deadline of August 30, 2019 whereas NMB filed the application on the 29th of August. Further, Rametex says that ACL managing director Stan Matiza confirmed in April 2020 that the legacy debt was approved for immediate transfer, but which was subsequently retracted by ACL, only to find out that it was not filed on time.
According to Ramtex: “these contradictory actions by ACL shed doubt on whether or not ACL acted in good faith.” During the High Court hearings the testimony from Matiza was full contradictions and did not match the official records submitted as evidence to the High Court. In its defence, ACL is saying it’s unfortunate the RBZ did not mention anything about the missing documents in their official response as it is the reason why the application failed.
Ramatex claims that if ACB had fulfilled its duties, the funds would have been released. The foreign company is seeking to recoup the funds with interest and legal costs.